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Costs are the greatest barrier for a significant fraction of the young renter demographic

Talk of lower mortgage rates may be prematureThe Bank of Canada lowers interest rates and mortgages get cheaper, right? Not necessarily. Yesterday, customers of TD Bank were told that there would be no rate cut for now as the bank bases those decisions on “a number of factors”. The other major banks have said that no decision has been made yet, but that they are assessing the situation. Rates are already low, of course, and with banks under increasing pressure from regulation and the squeeze on profits from the low oil price, they may not be too keen to pass on savings unless they have to. Experts say that the market will decide. Certainly if one lender breaks rank and cuts the cost of its home loans, others will likely follow. Historically, the banks have followed a BoC rate change but then the current economic conditions are not typical.

Alberta households are Canada’s top spenders
Canadian households spent an average of $58,592 on goods and services in 2013, up 4.1 per cent from 2012. The latest figures on household spending from Statistics Canada shows that mortgage and rent payments and other shelter costs accounted for 28 per cent of this total, followed by transportation (20.6 per cent) and food (13.6 per cent). Alberta households spent the most on goods and services ($71,429), followed by British Columbia ($61,007) and Ontario ($60,718). Households in Prince Edward Island ($47,410) reported the lowest average spending. Not surprisingly, those with children spent the most ($81,636) while seniors living alone spent the least ($29,064). Those with a mortgage spent around two per cent less on shelter than renters.

Vancouver woman enjoys her $39,000 home
When local house prices and rents become too unaffordable it can lead people to opt for unconventional solutions. Isabelle Mori decided that rent increases and roommates were no longer acceptable and chose to downsize in order to afford a home of her own. The result is a 186 square-foot home, constructed by a ‘small home’ specialist and situated on an RV park. The home has multifunctional living space and collapsible furniture and, while some may say that she’s just built a wooden caravan, Mori told CBC that she has no regrets about living in such a small space with her two cats!

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